Gas prices are expected to drop on Friday, according to one lobby group that closely monitors prices at the pumps.
Dan McTeague, president of Canadians for Affordable Energy, says prices are expected to dip by nine cents a litre, to an average of $1.82. He’s also forecasting a nine cent drop in diesel.
He chalks it up to a significant draw, which is a reduction of stored gas that determines the price of gas, diesel and other energy sources throughout North America.
McTeague said this usually means supply is running out and would normally lead to a rise in gas prices. But at the moment, that’s not the case.
“Prices would respond by saying,’ Hey, drop in supply means we got to do something about demand,’ but it didn’t. In fact, prices went the same route,” he said.
“They sold off $6, $7 a barrel. And the effect was about a 20 cent a gallon decrease, which is good enough for a 9 cent net decrease at the pumps come Friday.”He predicts that Saturday will have even cheaper prices at the pump, with encouraging prices for diesel too, which, falling 9 cents a litre Friday, drops 5 cents to about $2 a litre Saturday.
“The drops are most unusual given the ongoing war in Iran, continued impasse at the Straits of Hormuz and the surge in fuel demand this weekend in the U.S. with the Memorial Day long weekend,” he said.
McTeague said if the conflict resolves in the Middle East, he doesn’t expect the pricing rollercoaster to continue over the summer, since it will likely stabilize somewhere in the vicinity of what we’re currently paying.
That’s because the current gap of 1.6 billion barrels will take several months to fill, as the oil is travelling via seaborne vessels. Additionally, facilities throughout the Middle East, including some pipelines, have been damaged, and could take years to fix.
“Energy prices are going to remain very hot,” he said. “The longer we see these sort of falling prices when it makes no economic fundamental sense, the more serious and more aggravating the high prices are going to be in the foreseeable future, and that means a very expensive summer.”
McTeague said it’s important to plan accordingly and predicts that prices will continue to stay high into 2027.
